Allahabad High Court

ARUN KUMARversusSTATE OF U.P. AND ANOTHER

Decided: 15 September 2026
Bench: PRASHANT MISHRA I

Holding

The court declined to quash the complaint and instead ordered mediation, staying coercive action until the mediation process is completed.

Summary

Arun Kumar filed an application under Section 528 of the Criminal Procedure Code seeking to quash a complaint (Case No. 1789/2023) filed under Section 138 of the Negotiable Instruments Act for the dishonour of a cheque. He contended that the cheque was given as security for a venture capital transaction, that he had already paid Rs. 6,83,870 to the complainant, and that no demand was made, rendering the complaint an abuse of process. The State did not oppose the request for mediation. The High Court directed that the matter be referred to the Mediation Centre of the District Court, Prayagraj, with the applicant’s counsel participating, and stayed any coercive action pending the mediation outcome. The Court ordered the mediation to be completed within three months and required the applicant to file a certified copy of the order in the trial court. The interim protection would lapse if mediation fails, after which the trial court would proceed according to law. The application was thus disposed with directions for mediation.

Issues considered

Whether the complaint under Section 138 of the Negotiable Instruments Act can be quashed under Section 528 of the Criminal Procedure Code.
Whether interim protection and stay of coercive action are warranted pending mediation.
Whether the parties should be directed to resolve the dispute through mediation.

Legislation cited

Code of Criminal Procedure, 1973 — s. 528
Negotiable Instruments Act — s. 138

Subjects

Section 528 CrPC
Section 138 NI Act
cheque bounce
mediation
quash of criminal proceedings
interim protection
abuse of process

Judgment

HIGH COURT OF JUDICATURE AT ALLAHABAD
APPLICATION U/S 528 BNSS No. - 29592 of 2026

Arun Kumar
.....Applicant(s)
Versus

State of U.P. and Another
.....Opposite
Party(s)

Counsel for Applicant(s) : Ramakant Tiwari, Umesh Chandra
Tiwari
Counsel for Opposite Party(s) : G.A.

Court No. - 84
HON'BLE PRASHANT MISHRA-I, J.

1. Heard Mr. Ramakant Tiwari, learned counsel for the applicant and learned
A.G.A. representing the State.

2. Prayer of the applicant in the instant application is quoted herein below:

"It is, therefore, Most Respectfully prayed That, this Hon'ble Court may graciously be
pleased to allow this application and quash the entire proceeding of Complaint Case
No. 1789/2023, Sunil Kumar vs. Arun Kumar, u/S-138, Negotiable Instruments Act,
P.S. Sarai Mamrez, District Prayagraj, pending before the A.C.J.M., Court No.6,
Prayagraj, including impugned summoning order dated 21.10.2024 passed in above
case, relating to dishonour of cheque no.61 dated 05.02.2023 pending before the
A.C.J.M., Court No.6, Prayagraj, so that abuse of process of the Court be prevented
to meet the ends of justice.

It is also prayed to stay the further proceeding of the above Complaint Case No. 1789/
2023, Sunil Kumar vs. Arun Kumar, u/S- 138, Negotiable Instruments Act, P.S. Sarai
Mamrez, District Prayagraj, pending before the A.C.J.M., Court No.6, Prayagraj,
until the disposal of the above case before the Hon'ble Court.

And/or pass such and other order, which this Hon'ble Court may deem fit and proper
under the facts and circumstances of the case, in the interest of justice."

3. Learned counsel for the applicant submits that the applicant-Arun
Kumar resides in Mumbai. He further submits that applicant-Arun Kumar
and opposite party No. 2-Sunil Kumar were connected with each other
NA528 No. 29592 of 2026
2

through venture capital (V.C. Transaction) along with few other persons and
the applicant had given the cheques as security for future funding to opposite
party No. 2. It is also submitted that, on various occasions, the applicant had
paid certain amounts to opposite party No. 2 in his account details of which
he has annexed along with this application, and the amount which had been
paid by the applicant to opposite party No. 2 goes almost to the tune of Rs.
6,83,870/-. It is also submitted that no money was actually due on the day
and even after receiving the huge amount from the applicant (Rs. 6,83,870/-
), opposite party No. 2 has misused the cheques given as security. No
demand from the applicant was made by opposite party N. 2 even after
returning of the cheques twice by the bank. Although the learned counsel for
the applicant also prays that if the matter be referred to the mediation centre
of the district court concerned, it may be settled between the parties. He
further prays that since the applicant resides in Mumbai, it may be permitted
that his counsel may participate in the mediation proceedings before the
concerned mediation centre.

4. Learned A.G.A. did not oppose the averments made by learned counsel
for the applicant for mediation in the matter before the district court
concerned.

5. Accordingly, the matter is referred to the Mediation Centre, District
Court, Prayagraj. It is directed that learned counsel for the applicant shall
participate on behalf of the applicant in mediation before the concerned
mediation centre, as the applicant resides in Mumbai. Mediation Centre,
District Court, Prayagraj is also directed to facilitate the mediation
proceedings between the parties concerned after giving notice to opposite
party No. 2 fixing a date to appear before the Mediation Centre,
District Court, Prayagraj and also fixing appropriate amount payable to
opposite party No. 2 on his first appearance before mediation centre as well
as for expenses towards mediation centre of District Court, Prayagraj.

6. The Mediation Centre concerned shall conclude the mediation and
conciliation proceeding preferably within a period of three months from the
date of production of the certified copy of this order and will submit its
report to the concerned trial court.

7. The applicant is also directed to submit the certified copy of this order
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3

before the concerned trial court where the aforesaid case is pending within
two weeks from the date of production of certified copy of this order.

8. Till the report of the Mediation Centre, District Court, Prayagraj, is
received, no coercive action shall be taken against the applicant in the
aforesaid case.

9. After receiving the report/settlement of Mediation Centre, the learned trial
court concerned shall proceed in the matter in accordance with law.

10. However, it is made clear that in the event mediation fails, the interim
protection granted to the applicant in this case shall cease to operate and law
will take its own course.

11. With the aforesaid directions, the instant application finally stands
disposed of.

(Prashant Mishra-I,J.)
September 16, 2026
Kashifa

Digitally signed by :-
KASHIFA
High Court of Judicature at Allahabad

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